'A switch just flipped': Housing starts in Calgary hitting record highs, but demand remains higher

The housing stock needed for Calgary to remain affordable is unknown, but is currently being studied by CMHC

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Despite months of grim talk of labour shortages in Calgary’s construction industry, housing starts in the city are hitting record levels — though demand continues to outpace supply.

“Our brothers and sisters in the residential (construction) industry have pulled out incredible results despite some very difficult challenges,” said Bill Black, president and chief operating officer of the Calgary Construction Association.

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Concrete was poured for nearly 2,000 homes in Calgary last month, according to new data from the Canada Mortgage and Housing Corp. (CMHC) — a 51 per cent increase compared to the same month last year when there were 1,295 housing starts.

Single-detached housing starts increased by 61 per cent, while all other types of housing starts jumped 48 per cent.

But the city’s influx of newcomers over the past two years means demand is still far outpacing supply, Black said.

“Even though the year-over-year results are improved, we’re still not hitting the mark. The demand is still further outstripping even the achievements we’ve managed,” Black said.

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January’s numbers — high for a typically slow month for building — put Calgary on pace to end 2024 with more than 25,000 starts, though that number tends to fluctuate throughout the year. Last year the city started about 17,300 homes, up from approximately 15,000 in 2022.

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“In 2023, construction activity . . . reached an all-time high on an annual basis, and that basically reflects the whole trend that’s happening. A switch just flipped in 2021,” said Michael Mak, housing economist at CMHC.

Calgary housing construction
Construction continued on a multi-family project in the Belvedere area of southeast Calgary on Thursday, February 15, 2024. Gavin Young/Postmedia

Until early in the pandemic, Calgary’s home construction market had been in “full-blown retreat” since the 2014 recession, Black said. But migration, both international and interprovincial, has resulted in major housing demand in Calgary and across Alberta over the past three years. And it’s come amid Canada-wide labour shortages for the industry, which Black said Calgary has remarkably been able to overcome.

CMHC has projected Canada needs to build 3.5 million extra housing units by 2030 to restore affordability. The agency is currently studying what those needs are on a provincial and municipal level, Mak said.

Black similarly said he doesn’t have a baseline number for starts that would meet demand in Calgary, but said he looks for trends to get a sense for how the industry is faring.

“That (data) gives you a sense of, ‘Has the market plateaued or not?’ When I saw these stats earlier this week, I’m like, it’d be really nice if somebody would give a big round of applause to the industry that’s worked against the odds to still achieve that,” Black said.

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The Building Industry and Land Development Association’s Calgary region did not immediately respond to a request for comment on Thursday.

Calgary ‘more nimble’ at addressing population increse: CCA president

Calgary and Alberta are also outperforming several cities and provinces grappling with housing shortages.

Several growing Canadian cities, including London and Hamilton in Ontario, saw significant decreases in housing starts. Montreal, which posted more than 32,000 starts in 2022, started about 24,000 homes in 2023.

Meanwhile, Alberta started more single-detached homes in January (809) than the more densely populated Ontario (690). B.C. posted just 257 single-detached starts.

January housing starts graphic

Mak said Calgary has generally been “more nimble” at addressing population increases in recent years, partly due to its relatively large amount of available land.

When that new housing supply hits the market, however, is in question. Black said construction timelines have extended drastically in recent years.

“The trades are more thinly spread . . . they’re not able to just show up in a nice quick orderly sequence the way they used to,” Black said.

The federal government has committed $228 million to Calgary, which is expected to fast-track the construction of more than 6,800 units over the next three years and create more than 35,000 homes over the next decade.

Sean Fraser, Canada’s federal housing minister, was in Calgary last week meeting with city officials and industry, but did not speak with media and didn’t announce any further commitments related to housing during the trip.

[email protected]
X: @mattscace67

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